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Hotel tax revenue council’s ‘top priority’

LIHUE — Officials representing four of the state’s five counties say they will come together to push for five separate bills when the state Legislature convenes next week.

Those bills, outlined in a package jointly backed by the Kauai County Council, Honolulu City Council, Hawaii County Council, and Maui County Council, range from assisting domestic violence victims to funding a primary care training program for the state’s public health care provider, Hawaii Health Systems Corporation.

But what lawmakers and county officials agree will be a hot-button issue in the Legislature is one key topic in the package: garnering a larger share of the state transient accommodations tax. The tax is levied on the gross rental income of short-term accommodation operators in the state and divided among all four counties proportionally.

“We all need to come together and pitch our case that the counties take care of a lot of facilities, like the parks and beach parks, and provide public safety,” Kauai County Council Vice Chair Ross Kagawa said. “I think they’re being kind of irresponsible because we have duties that need to be done and it should come out of the TAT — it’s logical. Tourists don’t come to Hawaii for amusement parks or whatever — they come to visit the public beaches, trails and what have you.”

Before the Legislature imposed a cap on how much of those taxes should be distributed to all four counties statewide in 2011, the local governments collectively received a 44.8 percent share of TAT revenues.

The tax cap, however, placed a $93 million limit on the proportional amount of TAT revenue that each county can collect: 14.5 percent for Kauai County; 18.6 percent for Hawaii County; 44.1 percent for the City and County of Honolulu; and 22.8 percent for Maui County.

During the last legislative session, lawmakers increased the amount of TAT money that would be distributed from $93 to $103 million for the next two years.

Those changes amounted to a nearly $1.4 million bump in revenues for the County of Kauai each year — a far cry from the nearly $10 million that the county would have received, if the cap had been removed completely.

“It’s clear we need revenue and I believe we’re entitled to the visitor monies because of the amount of support our county services give to visitors, so the TAT is, I would say, the top priority, although the Legislature has sent messages to the counties that they’re not going to take that up this year,” Councilwoman JoAnn Yukimura said.

Rep. Daynette “Dee” Morikawa, D, Koloa-Niihau agreed. She said county officials may find themselves in a hard-pressed position if they push for more TAT money.

“We know that the TAT is the top priority that will definitely come up in the session,” Morikawa wrote in an email. “What comes out at the end is tough, because I don’t see state revenues able to support doling out much money in the next two years.”

Rep. Derek Kawakami, Wailua-Hanalei, said he supports the collective effort of the counties to regain their full share of the tax revenues and will “help to educate some of the other representatives on the importance and the historic partnership that the state has had with the counties as far as the allocation of the TAT.”

“I know it was capped for financial reasons during the Great Recession, and now that we’re slowly moving out of that period, I feel that their funding should be restored,” Kawakami said. “We’ll be pushing for that once again.”

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